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USD Dips as Markets Eye Recovery

Published on: 10/18/18 3:07 PM

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Category: Currency, Forex, Latest News, Market, US News

A tumultuous week on Wall Street


A tumultuous week on Wall Street and markets around the globe has been replaced with relative calm this week so far. The plummet of the Dow last Wednesday and Thursday combined with the uncertainty around the disappearance of US journalist and Saudi national Jamal Khashoggi contributed to host of uncertainties as the trading markets closed for the week. A massive sell-off in global equities to end the week manifested itself in a back-and-forth dynamic as the markets opened on Monday.

What remains steady throughout the uncertainty is price currencies. At the close of the trading day on Monday, the US Dollar (USD) held its ground at 95.00. Last Tuesday, the USD tested the over 96.00 level but quickly retreated and backed down. Sellers are now in the driver’s seat as the price is dipping to its three-week low.

The EUR/USD is continuing its push up to the 1.1600-handle benchmark while the GBP/USD is moving forward with its bullish trend. Last week, the index inched above the 1.3200 mark, indicating a move over a key psychological level that may lead to a behavioral change with the market. As the trading market opened this week, an aggressive gap-lower has sent prices back over the 1.3200 handle.

As the Dow sell-offs dominated the market headlines last week, the index is looking to hold its support at the 25,000 level. Following Monday’s trading day, US futures are now showing a bounce. Meanwhile, on the S&P 500, the prospect of a trend toward bullish tendencies could be indicated with a break above the 2795/2800 level. This number would demonstrate that the bulls are back in control despite last week’s massive sell-off and drop.

Upcoming week


When looking at the week ahead, there are a number of significant Q3 earnings reports due out that could affect the outlook. Investors and financial analysts will be examining these reports closely to indicate signs of continuing growth in the economy. A light macro schedule will be in direct contrast to the heavy earnings reports action.

In the global markets, the UK is set to release its inflation report for the month of September on Wednesday. The Federal Open Market Committee (FOMC) is also set to release its meeting minutes on Wednesday. Friday brings the release of the Japanese inflation report as well as the Canadian Consumer Price Index numbers. The Bank of England (BoE) Governor Mark Carney is also set to speak on Friday.